Chapter 224 Series A Financing
Establishing an option pool to reward employee options is a routine operation for technology companies, and shareholders cannot refuse.
So, everyone’s equity has changed.
Xu Liang’s equity is diluted to 68.36%, Morgan’s is diluted to 7.27%, 3i Group, Temasek and MIH Group are diluted to 3.63%, SoftBank is diluted to 3%, and Sun Haizhen is diluted to 1.36%.
After signing the contract, the Hongmeng International Board of Directors was also established.
Xu Liang serves as chairman, and Morgan, 3i Group, Temasek, MIH Group, and SoftBank each send a director to form a six-person board of directors.
Because of Hongmeng International’s unique management system, the board of directors usually has nothing to do. It only reviews Hongmeng International’s finances every quarter and discusses major issues, without involving the specific management of the company.
The office address of the board of directors has also been placed in Xiangjiang.
The day after the contract was signed, the two parties held a press conference at the Peninsula Hotel to officially announce Hongmeng’s Series A financing.
Xu Liang specifically explained that except for the contract documents, all other documents had omitted the four words "Hongmeng International" and only used "Hongmeng".
He wants to convey an illusion to the outside world.
It was Hongmeng that raised US$560 million, not Hongmeng International.
Wearing the skin of a joint venture can save you a lot of unnecessary trouble.
As soon as the press conference was held, it was no surprise that it caused a sensation in the entire Internet circle.
And not only China, but also Silicon Valley has special reports.
After all, the Nasdaq crisis is still showing no signs of improvement. Internet companies around the world are going bankrupt. Even big companies like Yahoo are having a hard time.
Hongmeng was valued at US$2.8 billion and raised US$560 million.
Everyone wants to see what magic this company has.
Looking at the crowd below, including reporters from hundreds of major Chinese and foreign media, Xie Wen, who was sitting in the main seat, was excited but also a little nervous.
The secretary came over and reminded.
"Mr. Xie, it's almost time, we can start."
Xie Wen nodded and took a slight breath.
After trying the painting tube without any problem.
"Friends from the media present, please be quiet. Now our Hongmeng Financing press conference has officially begun."
Xie Wen, Sherron Watkins, Peter Jackson, Zhou Pinghe.com Dawei and the five people signed the contract in a pretentious manner under the witness of the media.
Then applause broke out.
Soon it was time for reporters to ask questions.
“I am Rice, a reporter from the New York Times. I would like to ask Mr. Watkins, before the Nasdaq crisis has passed, why invest in a company with a price-earnings ratio of 35 times? Is the risk of Oriental Internet Company, which is less than two years old, too great?”
Sharon Watkins said with a smile: “It is normal for all investments to be risky.” I feel that the risk is not great. Although Hongmeng has only been established for a short period of time, they have a clear profit model, clear main business, and excellent management. From its establishment to the present, it has grown by more than 10% every month
Especially. Their growth was achieved against the backdrop of the Nasdaq crisis, which is incredible.
I can't imagine how good they'll be once this crisis is over.
So, Morgan invested in them without hesitation, even at 35 times the financing. ”
After saying that, he put down the painting tube in his hand.
The press officer of the press conference quickly motioned to the management below to hand the painting tube to the second reporter.
“I am Jiro Oda, a reporter from the Asahi Shimbun. I would like to ask President Xie Wen, what is the basis for Hongmeng’s valuation of US$2.8 billion? Can your business and revenue really support such a high valuation? ”
Xie Wen smiled, "It seems that this reporter doesn't know much about Hongmeng.
Let me tell you briefly.
So far, Bing Search, a subsidiary of Hongmeng Company, It is the largest Internet search company in China, South Korea, and Japan, including 11 Southeast Asian countries, with a market share of more than 60% or even higher.
Currently, it has 1.5 billion search databases and nearly 200 million daily visits. .
Our gaming business under Hongmeng is currently ranked first in China, second in South Korea, and in the top three in Southeast Asia.
The company's six games currently have 78 million registered users and more than 3.2 million simultaneous online users.
"Legend 2 Legend" is currently the most popular game in China, the Philippines, Indonesia and other places.
"Miracle MU" is the most popular game in South Korea, Hong Kong, Wanwan, Singapore and other places.
"Bubble Show" is currently the third-ranked game in Japan.
Our music business under Hongmeng is currently the most popular music website in East and Southeast Asia, with more than 50 million registered users. We also cooperate with major music companies and independent singers in various countries to provide all users with the richest and most comprehensive services. Great authentic music.
Our portal website Naver is the first in Southeast Asia and the second in South Korea.
In addition, many of our Hongmeng businesses are also very competitive in the East and Southeast Asian markets. This is the basis for our Hongmeng valuation of US$2.8 billion. ”
Many media heard about Hongmeng for the first time, so they didn’t know much about it. Now Xie Wen’s words undoubtedly shocked them.
It turns out that Hongmeng is not the lucky one they thought. But it really has the foundation of 2.8 billion US dollars.
But they don’t know that Hongmeng China did not participate in the financing this time. Otherwise, it would not be 2.8 billion, but 3.5 billion, or even higher.
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Next comes the third reporter. "I am Wang Yufei, a reporter from the South China Morning Post. I would like to ask President Xie Wen, what are Hongmeng's next development plans after raising US$560 million?"
Xie Wenxiao Said: "After the financing is completed, in addition to continuing to consolidate and develop our existing business, we will enter the European market."...
Looking at the broadcast of the press conference on TV.
Silva James was angry. He was originally determined to win Hongmeng’s financing, but he didn’t expect someone to pick the peach midway?
He hated looking at Sherron Watkins' smug face on TV.
After all, we are colleagues on Wall Street, so we should notify you when you grab a project.
Take a deep breath, take out your cell phone and call Xu Liang.
The call was quickly connected.
"Mr. Xu, is your company going too far? Why did you hand over the project to Morgan Stanley when you were obviously discussing cooperation with Goldman Sachs?"
"Mr. James, in fact, I was inclined to cooperate with you Goldman Sachs from the beginning, otherwise I would not have contacted you so early. But we have been talking for so long, and your company has always been unable to meet our requirements..."
James interrupted rudely: "Mr. Xu, we have regressed. A price-to-earnings ratio of 25 times is in line with Hongmeng's value."
"Mr. James, if you were sitting in my position, a company The price-to-earnings ratio is 35 times, and one company is quoting 25 times, and the resources provided by the two companies are similar. Who would you choose?”
James is not stupid, of course he chooses the former, but he is the latter now, so of course he can’t do that? explain.
“As far as I know, your company gave up Hongmeng’s listing lead underwriting rights to Morgan Stanley in exchange for a price-earnings ratio valuation of 35 times. If you give this power to us at Goldman Sachs, we will also give you 35 times. times valuation.”
"Mr. James, Morgan Stanley requested the lead underwriting rights for the listing, so we agreed. Your company has no request, and the price-to-earnings ratio is not high, so naturally we will not compromise."
After a pause, Xu Liang continued.
"Mr. James, our Hongmeng still has Series B financing. I personally very much hope to cooperate with Goldman Sachs.
That's it. I still have a job here, so I won't talk to Mr. James more. Let’s talk. When I have time, I’ll treat you to dinner.”
After saying ‘goodbye’, Xu Liang hung up the phone.
"It seems that SoftBank is not the only one who is disappointed after this financing." Son Zhengyi said with a wry smile.
“I was the first to find you, but you were unwilling to give in, so I had no choice. But at least SoftBank still holds 3% of our shares, which is quite a lot.” Xu Liang smiled.
Sun Zhengyi sighed, "I would rather not have these 3% shares."
It was because he already had a part of the shares that his expectations for Hongmeng shares were weakened. I always want to jointly lower the price, let Hongmeng compromise, and then get the shares at a low price.
Unexpectedly, Xu Liang took the plunge and hired Morgan Stanley to lead the investment.
By the time he received the news, it was too late.
At this moment, Son Zhengyi felt extremely regretful.
Without this part of the equity, stemming from the strong desire in his heart, he will definitely do whatever it takes, even if it is a price-earnings ratio of 35 times, he will not hesitate.
Just like a hungry person, when encountering a big meal, his desire to eat is 100%.
If a person is half full, his desire to eat may only be half.
Xu Liang understood what he meant and smiled slightly.
"Mr. Sun, when our Hongmeng Series B financing is completed, SoftBank will still have a chance."
When he heard about the Series B round, Sun Zhengyi's expression became more complicated.
The initial investment of US$3.5 million has increased in value to US$100 million in less than a year.
The growth of more than 30 times has indeed made him a lot of money.
But if Hongmeng’s current momentum continues, by the time it reaches Series B financing, the valuation is likely to reach seven to eight billion, or even tens of billions of dollars.
At that point, it will be more expensive to acquire equity.
And even if they obtain shares, they will lose the opportunity for Hongmeng’s equity to increase in value during the period from Series A financing to Series B financing.
The money earned from 10% equity is definitely not on the same level as the money earned from 3.9% equity.
But the done deal is too late to regret.
Seeing Sun Zhengyi's face full of regret, Xu Liangliang also felt a little happy.
If you fail to use the opportunity given to you, who should you blame?
However, Son Zhengyi is an elite who has been tested in the shopping mall for a long time. After taking a deep breath, his expression slowly calmed down.
If an opportunity is lost, it is lost. It is useless to regret it. Keep your eyes open, remember the lessons, and seize the next opportunity.
"Mr. Xu, only Hongmeng International is financing this time. When will Hongmeng China raise funds?"
"Hongmeng Huaxia is now very profitable. We are not short of money and do not need assistance from outside forces, so we may not raise funds in one or two years." Xu Liangdao.
“If you raise funds, please be sure to give us a chance.” Son said seriously.
“I will give you the opportunity, but whether you can seize it depends on Mr. Sun himself.”
“Of course.”
Sun Zhengyi’s tone is firm, and he will teach you the same lesson again. That's enough.
(End of this chapter)